USD/CHF appreciates to near 0.7950 due to Swiss economic concerns

• USD/CHF gains ground as the Swiss Franc struggles due to economic concerns.
• SECO maintained Switzerland's 2025 GDP growth forecast at a below-average 1.3% in its October outlook.
• The US Dollar faces challenges as the government shutdown has stretched into its 19th day with no resolution in sight.

USD/CHF holds ground for the second consecutive day, hovering around 0.7930 during the Asian trading hours on Monday. The pair receives support as the Swiss Franc (CHF) weakens over domestic economic concerns. Traders will likely observe the Swiss Trade Balance data to gain further impetus on the Swiss economy, scheduled to be released on Tuesday.

The State Secretariat for Economic Affairs (SECO) kept its 2025 GDP growth forecast in Switzerland unchanged at a below-average 1.3% in its October outlook, citing a significant slowdown in the second half of the year. For 2026, SECO lowered its growth projection to 0.9% from 1.2% in June.

The upside of the USD/CHF pair could be capped as the US Dollar (USD) remains under pressure as the government shutdown extends into its 19th day with no resolution in sight. Senators failed for the tenth time on Thursday to end the stalemate, marking the third-longest funding lapse in modern US history.

The US Dollar also faces challenges amid the increased likelihood of further rate cuts by the US Federal Reserve (Fed). The CME FedWatch Tool indicates that markets are now pricing in nearly a 100% chance of a Fed rate cut in October and a 96% possibility of another reduction in December.

However, the downside of the USD could be restrained amid easing trade tensions between the United States and China after US President Donald Trump said that he wants China to buy soybeans at least in the amount they were buying before. Trump added that he believes China will make a deal on soybeans. "We can lower what China has to pay in tariffs, but China has to do things for us too," he added.